FORTESCUE chief executive Nev Power delivered a significant and very timely keynote address to last week’s 2014 Australian Resource People Summit, calling for a more balanced and productive workplace system while criticising the ‘monopoly power’ granted to the union involved in the Port Hedland tugboat operator dispute.
After outlining the economic and employment benefits delivered by Fortescue’s Pilbara operations to the local, state and national communities, Mr Power explained how the impacts of an unbalanced workplace system was compounded by increasing competition from global resource markets.
“The impact of our project has been very significant for the state and for Australia. We want to see that continue into the future…but that future is all about (maintaining) our position on the global cost curve,” Mr Power told about 300 delegates from across AREEA’s membership.
“We have to understand that in the game of resources – which is so critical to Western Australia and Australia – we are not fixed and we need to continually work on improving our cost position.
“I have a concern in that journey on what is happening in terms of industrial action in Australia. From 2007 through to 2013, we have seen a massive increase in days lost due to industrial action. This is a return to the mid-80s and early 90’s that saw the destruction of so much of the competitiveness our industry.”
Using data showing the dismal productivity performance of Australia’s mining sector, particularly compared to agriculture, Mr Power criticised the approach of the Maritime Union of Australia (MUA) in the Port Hedland tug boat dispute.
He questioned how Australia’s industrial relations system could potentially allow ’54 or 55 employees’ to cause stoppages of the Pilbara’s lucrative iron ore export projects and cost the Western Australian economy $7 million per day.
“In three days, the strike would cost the West Australian taxpayer the entire 2015 budget for the homeless in Western Australia…it will cost the construction of a primary school,” the Fortescue boss said.
“This is a dispute that doesn’t just occur between the employees and the employer. We have a very small group of people who have extreme monopoly power over not only their employer, but all of the companies that use that port; all of the employees throughout the Pilbara whose companies use that port; the Western Australian taxpayer; and the federal taxpayer.
“And it’s not just about the impact to mining companies; this impacts on people. What’s wrong with our system that we can have this happen?”
Above all, said Mr Power, such a scenario impacts on Australia’s global reputation as a ‘reliable and competitive supply market’.
He noted how Australia’s largest customer, Japan, founded its own iron ore producer in the 1980s as a direct response to concerns about Australia’s poor industrial disputation. The Japanese company, Vale, is now the largest iron ore producer in the world.
The Fortescue chief said Australia can no longer afford to accept a ‘swinging pendulum of industrial relations policy’ and that our national policy makers need to ‘start thinking about an industrial relations system that suits us for today and for the future’.
“I put to you that we don’t want industrial law, which is so critical for our productivity and the future development of our economies, to be a political football that swings one way or another depending on the colour of politics that are in power at the time,” Mr Power said.
“We are very proud of what we’ve achieved at Fortescue and we have been able to do that in an environment that has been relatively free from industrial manipulation and industrial sabotage.
“We want to make sure that the legislation and the environment going forward allows Fortescue’s of the future to continue to develop and that they are not lost to future generations and the economic development of our country.”
Watch Fortescue CEO Nev Power’s keynote address to the 2014 Australian Resource People Summit here.
